Economics for the rest of us

Hang on for a minute...we're trying to find some more stories you might like.

Email This Story

Send email to this addressEnter Your NameAdd a comment hereVerification

When Apple dropped the price of its iPhone by $200 last week, the enormous public outcry that ensued caused the company to release a public apology. As if the apology wasn’t good enough, Apple is also offering customers who purchased the product at its original price a $100 credit. Many consumers have trouble wrapping their heads around this price drop; to them, it’s completely arbitrary and unfair. Basic economics, however, would beg to differ. It makes perfect sense for a company to encourage more demand by lowering the price. Unfortunately, too few people have an adequate enough background of these principles to understand why the price dropped, so instead they turn to outrage.

The same lack of understanding is present here at the University. While Economics 101 and 102 — micro and macroeconomics, respectively — usually have full enrollment, these classes cater to a specific type of student. As a requirement for Business School applicants, these classes have become a battleground for future CEOs. They are also favorites of some engineering students. So what about the rest of us, the many liberal arts students who struggle to figure out the tip at a restaurant? Perhaps the University should create a class to educate us as well.

There are many aspects of Econ 101 and 102 that appear daunting enough to prevent average University students from taking them. The reputations of these classes are intimidating for the student who has not taken anything math-related since high school. In a class with fiercely competitive B-School applicants, there is also the problem of the grade distribution mandated by the Economics Department. Because these classes are graded on a curve, the incentive to learn more about economics isn’t so enticing, considering the GPA hit that might be involved.

There are many reasons for people without specific goals in business or economics fields to take an econ course or two. For example, in my History 318 class last week, the professor referenced common principles of capitalism but had to explain the basics of supply, demand, capital and labor. His (correct) assumption was that many of his students had not taken economics. Although the course is not required for LSA students, except for economics concentrators, the material and basic principles are important.

Consider political science classes that blend basic economic principles into their discussion. To compensate for a lack of economic knowledge in my Political Science 160 two years ago, there was an out-of-class session to explain the basics. This was necessary because the material would otherwise be too complicated for some students. Economics and political science principles work interdependently, but any political science student can graduate from the University without having a true survey of economics.

The University should offer an economics course geared more toward LSA students majoring in fields like history and political science. These students would benefit from a course that works on a more theoretical level. This type of course should use material more relevant to politics and history.

For those students who thoroughly enjoy economics and don’t have problems with either Econ 101 or 102, then this proposition may seem irrelevant. However, there are a legitimate amount of University students who are afraid of economics — to their detriment. An understanding of economics basics is something any person should be able to attain at the university level without fear of their grades suffering or intense competition. The fact that some professors are having to give side lessons in economics is proof that there is a need not being met.

While the outrage over the iPhone’s price drop showed that major portions of America do not understand basic supply and demand, there is no reason why University of Michigan students should be part of that uninformed group.